As big tech vies after clean power for its larger-than-life data centers or continuing As big tech seeks clean power for its massive data centers and continued innovation in AI, owners of shuttered power plants are finding incentives to reopen.
Microsoft inked a deal with Three Mile Island to purchase power from the plant over the next 20 years.
“Microsoft continues to collaborate with energy providers to develop carbon-free energy sources to help meet the grid’s capacity and reliability needs,” said Bobby Hollis, VP of Energy at Microsoft.
Pennsylvania legislators began discussions earlier this month on the reopening of Three Mile Island Unit 1 — the only reactor still functional after the country’s worst nuclear accident at Unit 2 in 1979.
“As good as renewable energy has been… we need baseload power in this country. We need power that runs 24/7,” Joseph Dominguez, CEO of Constellation, told Bloomberg Markets about the need for clean energy that does not rely on wind or solar.
Microsoft continues to collaborate with energy providers to develop carbon-free energy.
Constellation had previously stated that restarting Unit 1 was “technically feasible,” but the company’s official position was that no decision had been made. Despite no confirmation at the time, anti-nuclear groups quickly presented arguments to officials in Harrisburg against the potential reopening.
“We were told: let the marketplace decide. The market decided, and they decided it’s not nuclear,” Eric Epstein of the watchdog group Three Mile Island Alert told reporters on Sept. 6.
Epstein referred to the economic challenges that Pennsylvania-based nuclear companies faced before ultimately shutting down the plant five years ago. Rivals offered cheaper products as natural gas prices hit historic lows and demand for nuclear power flatlined. Nuclear power peaked above 20% of U.S. electricity in the 1990s, but 12 reactors shut down between 2012 and 2021.
$25 billion:
However, the boom in clean-tech manufacturing — along with advancements in AI and other technology that rely heavily on data centers — has exposed the need for the U.S.’s outdated power grid to be upgraded to remain competitive. The federal government is taking notice.
“[The Microsoft deal] begins to get the country off its heels and maybe away from outdated stigmas when it comes to powering the U.S. market via nuclear,” Courtland Robinson, Director of Business Development at Brasfield & Gorrie, told Area Development.
“These hyper-scalers are spending $25 billion a quarter this year on data center development.”
We need baseload power in this country… power that runs 24/7.
In March, the U.S. Department of Energy announced a $1.5 billion loan guarantee for the repowering of Palisades Nuclear Plant in Covert, Michigan. Palisades, once named one of the worst-performing reactors in the U.S., would be the first shuttered power plant to reopen, likely leading to a complex process.
While Palisades’ history hasn’t received the same media attention as Three Mile Island, the plant’s community remains divided over its restart. The 52-year-old facility had experienced equipment failures, broken fuel rods, and fuel spills. In 2008, five workers were trapped in a high-temperature area for 90 minutes due to a malfunctioning hatch.
Nevertheless, the reopening of Palisades may inspire similar federal incentives for Three Mile Island shareholders. As tech giants like Bill Gates and OpenAI’s Sam Altman invest in nuclear power affiliates, owners of decommissioned plants are eager to form partnerships.
“There is already a co-location of data centers with nuclear facilities that have been built,” Dominguez said.
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Co-locating data centers near nuclear power plants can reduce energy delivery costs. Earlier this year, Talen Energy sold a data center campus near its Susquehanna plant to Amazon Web Services. The trend of co-locating data centers with nuclear facilities makes former energy-generating sites more attractive to companies like Constellation.
“If nuclear operators are ready to receive that capital [from big tech] and reinvest it into their facilities, it will inspire other markets,” Robinson added.
Data centers aren’t the only facilities seeking clean energy. The demand for lower emissions spans electric vehicles, factories, and utilities. The Microsoft deal with Three Mile Island could pave the way for closer partnerships between nuclear power and emerging industries.
